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TRANSCRIPT
Master of
Cost Estimating
and Analysis Brief
1
Program Brief, June 2015
Dr. Daniel A. Nussbaum
Co-Program Manager, MCEA
Gregory K. Mislick, LtCol USMC (Ret)
Co-Program Manager, MCEA
Agenda
Background of Program
Who We Are
Why is this Program Important?
What We are Doing: Overview
Master’s Overview
Curriculum Overview/Capstone Projects
First Four Cohort Demographics
Challenges and Issues
Solicit your Questions and Feedback
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Background
Jointly developed a Distributed Learning Cost
Estimating and Analysis Master’s Degree Program
between AFIT and NPS Master’s Program (16 courses)
Certificate (4 courses)
Open to all personnel
DoD Civilians
Military (officers and enlisted)
Defense Contractors
Foreign Officers
Civilians from Ministry of Defense
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Initial Request from NAVSEA in Winter 2010 Specific interest in collaboration between AFIT and NPS
Initial development funding received from
NAVSEA and NAVAIR, Summer 2010
Strong Stated Interest/Support All Services, OSD
Service Cost Centers
Background
We have received and incorporated
numerous ideas concerning course content
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NPS: 100+ Years of
Graduate Military Education Accredited:
WASC, ABET, AACSB, NASPAA
Operationally Relevant
Unique advanced education and research programs increasing the combat effectiveness of U.S. and Allied armed forces
Accomplishing the Mission
Program of Record-focused graduate schools, institutes, and research centers.
Education built on operational experience.
An innovative environment: solutions to current, near-term and long-term national security needs.
Opportunity to experiment with the latest operational technologies in an academic environment.
• Postgraduate Master’s, Engineering and Doctorate Degrees
• Programs renewed every two years based on emerging requirements
• Clear focus on military systems and applications
U.S. Navy
42%
Other U.S.
5%
U.S. Marine
Corps
13%
U.S. Coast
Guard
<1%
U.S. Air Force
14%
U.S. Army7%
International
19%
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Why is This Program Important?
Cost Estimating is in the Department of Defense
spotlight
Weapons System Acquisition Reform Act of 2009
Combined OSD PA&E and the Cost Analysis Improvement
Group (CAIG) into the Director of Cost Assessment and
Program Evaluation (D-CAPE), with two deputy directors:
Deputy Director for Cost Assessment.
Deputy Director for Program Evaluation
The Director [D-CAPE] was a new position (2009), Senate-
confirmable, reporting directly to SECDEF, with annual
Congressional reporting requirements.
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Why is this program important?
Large expansion underway in DoD cost estimating cadre.
Target Population:
Most new hires will be recent college graduates, untutored in DoD/mostly clueless about cost estimating.
There are also a number of GS-12s to GS-15s who are already cost estimators, but who lack formal education in the field.
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High Level Visibility
“ I don’t need more cost estimators; I
need better cost estimators…”
[Hon. Sean Stackley, ASN(RD&A)]
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Benefits
All graduates will earn a Master of Cost
Estimating and Analysis Degree upon
completion.
Intent is for Master’s Program to Fulfill the
Educational Requirements for DAWIA Level I, II,
and III Certification (BUS-CE) for all services.
Seven years of experience still needed for
completion.
Air Force has granted its approval for all cohorts
Army has granted its approval for all cohorts
Navy approval for first two cohorts. NAVSEA heading
working group to resolve10
What We Are Doing: Overview
Two year program: 3 cohorts (70 students) have
graduated so far!
2 classes per quarter
4 quarters per year
Delivery modes Asynchronous (computer based; no face-to-face instructional
time, one class each quarter)
Synchronous (class with an instructor: one class each quarter)
VTE / VTC / DCO
Fourth cohort: Classes meet Thursdays, 1400-1700 (EST),
same time slot for two years
Fifth cohort: Classes meet Wednesdays, 1400-1700 (EST),
same time slot for two years
Sixth (next) cohort: Classes will meet Thursdays, 1400-1700
(EST), same time slot for two years 11
Curriculum Overview
Foundational courses Probability and Statistics (2 Courses)
Operations Research for Cost Analysts
Acquisition of Defense Systems
Defense Financial Management and Budgeting (2 Courses)
(one on policy, one on practice)
Systems Engineering (2 Courses)
Cost Estimating courses
Cost Estimating I, II, and III: Methods and Techniques, Advanced
Concepts, Risk and Uncertainty
Cost Estimating IV: Applied Cost Analysis
Cost Estimating V: Cost/Engineering Economics, Case Studies
Cost Estimating VI: Decision Analysis
Capstone Project (final two quarters)12
Capstone Projects
Final two quarters of program
Students will work in groups of three and will be
assigned real projects provided by the cost
organizations (OSD-CAPE, NAVSEA, NAVAIR,
AFCAA, DASA-CE, NCCA, MDA, TACOM, etc.)
Either work on part of a larger program, or work
on a small program: “Bite-sized and focused”
Project Deliverables: Research paper, and a ppt
presentation to sponsoring command
Published?
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Sample Capstone Projects
“Simple Software Cost Estimation Model Without
Adaptation Adjustment Factor:” Sponsor: AFCAA
“Profit:” Develop a CER that relates fee/profit to an
economic indicator by phase of acquisition. Sponsor:
NCCA
“Analyze/Update SE/PM Analysis:” Sponsor: NAVAIR
“Investigating Learning and Rate in Vehicle Production:”
Sponsor: MDA
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Sample Capstone Projects (cont)
“Analysis of Contractor Cost Structures and Rates:”
Evaluate impacts of factors such as business base
changes, evolution away from defense work to
commercial, and pension impacts. Sponsor: NAVAIR
“Future Exchange Rates Predictor:” Researching the
best predictors. Sponsor: AFCAA
“Analysis of O&S Costs for the Littoral Combat Ship
Compared to Other Ship Types.” Sponsor: NCCA
“Characterization, Comparison, and Replication of
Common Software Estimation Tools.” Sponsor: MDA15
Timetable
Cohort #1: Graduated March 2013
Cohort #2: Graduated March 2014
Cohort #3: Graduated March 2015
“Feedback Forum” in Monterey for all three
Cohort #4: Commenced Spring Quarter 2014
Cohort #5: Commenced Spring Quarter 2015
Cohort #6: Will commence Spring 2016
Our Focus:
One cohort per year, 25 – 30 students per cohort16
Demographics of First Cohort
Applicants: 74, Selected: 32 Graduated: 24
Mostly Navy and Air Force represented, plus a few
contractors:
NAVSEA: 5
NAVAIR: 5
NUWC-Newport: 4
NSWCDD Dahlgren: 3
Pentagon: NCCA, OSD (CAPE), AFCAA: 4
AF Space and Missile Center, Los Angeles: 5
NGIA, AFMC: 2 (DC and Hanscom, MA)
Contractors: 4
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Demographics of First Cohort
All applicants were working in the cost estimation field at
their respective commands
Rank/Grade Breakdown:
GS 7 – GS 15
One Active Duty Navy 0-6
One Active Duty Air Force O-2
Four contractors (Boeing, Cask Technologies, EM
Solutions, Wyle Aerospace)18
Demographics of Other Cohorts
Cohort #2:
33 Students Selected, 26 graduated.
Navy, Air Force, Army, JHU/APL, and contractor
involvement this cohort
Cohort #3:
Commenced with 26 students, graduated 20 (a few
moved to a later cohort): Air Force, Army, Navy and
Marine Corps involvement, TSA and Defense Security
Service, MITRE Corporation, plus one contractor.
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Demographics of Other Cohorts
Cohort #4:
Commenced with 25 students, presently at 24.
Continued support from all services. In addition: GAO,
NELO, MARCORSYSCOM
Cohort #5:
Recently commenced with 30 students. Continued
support from all services:
US Army: 8
USAF: 7
USMC: 5 (including 3 active duty)
USN: 8
OSD: 1
GAO: 1205/12/2015
Certificate Program Available, as well
A four course sequence leading to a Certificate in Cost
Estimating and Analysis.
You will take one class per quarter for four consecutive
quarters.
Next Class commences early July 2015.
The Four Courses Include:
Operations Research Methods for Cost Analysts
Cost I: Methods and Techniques
Cost II: Advanced Concepts in Cost Estimating
Cost III: Risk and Uncertainty Analysis
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Challenges and Issues
Tuition MUST be paid for by student’s command, with
Command Endorsement a requirement. GI Bill and
personal funds cannot be used for tuition. Funding
programs available include 852 funds and Tuition
Assistance – availability varies by service.
As of Cohort #4, the program is being taught entirely by
NPS instructors.
VTC Limitations: NPS IT can handle a maximum of 20
VTC sites dialing in for one class. On average 10-15
sites are needed.
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Advertising
Tri-folds available
Website URLhttp://www.nps.edu/Academics/DL/DLPrograms/Program
s/degProgs_MCEA.html
MCEA Video on websitehttp://www.nps.edu/video/portal/Video.aspx?enc=JkJoO
pnrBNc8itOw2LqZ4p8wswvm0Vlv
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Points of Contact:
Name Organization email
Dan Nussbaum NPS [email protected]
Greg Mislick NPS [email protected]
Kevin Maher NPS [email protected]
Morris Fields NAVSEA [email protected]
Dane Cooper NAVSEA [email protected]
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Cost Estimation I: Subject Areas
Introduction to Cost Estimating
Cost Processes
Data Collection and Sources
(CSDR/CPR/SAR/SRDR, …….)
Data Bases Used (VAMOSC, DCARC, DAMIR,
etc…….)
Introduction to Earned Value Management
Data Normalization
Statistics for Cost Estimators
Methodologies (Analogy, Parametric, …….)26
Cost Estimation I: Subject Areas (cont)
Regression Analysis
Learning Curves (Unit Theory, Cum Average
Theory, Production Breaks, Step Down
Functions, Production Rates)
Cost Factors
Wrap Rates
Analogy Technique
Introduction to Software Cost Estimating
Introduction to Risk and Uncertainty Analysis
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Cost Estimation II: Subject Areas
Cost Estimate Documentation
WBS, Data Requirements
Labor and Overhead Rates
Direct Materials and other Support Costs
Operating and Support Costs
PBL, CLS, Organic
Total Ownership Cost
Cost per Flying Hour
Earned Value Management Systems
Estimates at Completion
Cost and Schedule Overruns
Two Major Cost Estimating Projects
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Cost Estimation III: Subject Areas
Introduction to Cost and Schedule Risk and Uncertainty
Review of Probability for Cost Analysts
Monte Carlo Simulation with @Risk
Understanding the Nature of CER and Cost Driver Uncertainty
The Impact of Correlation
Schedule Risk Analysis
Phasing the Cost Estimate
Putting It All Together: Project Preparation: Examining the technical and programmatic description of an acquisition program, then develop appropriate WBS’s for cost estimating
Course Project
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Cost Estimation IV: Subject Areas
Cost Estimating in the “Post-WSARA” Era
Considerations in Early Phases of Major Acquisition
Programs
Requirements Formation
Materiel Development Decision (MDD)
Analyses of Alternatives (AoAs)
Case Studies for Milestone A, B and C Defense
Acquisition Board (DAB) reviews of programs
Full-Rate Production (FRP) decisions
Post-IOC Analyses
Considerations prior to release of Requests for
Proposals (RFPs)
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Cost Estimation IV: Subject Areas (cont)
Savings Achieved through Multi-Year Procurement
Contracts
Joint Urgent Operational Needs (JUONs) and Rapid
Acquisition Requirements Outside the Normal DoD
process.
“Rescuing a Program in Trouble,” or “Supporting a
Decision to Terminate a Program.”
315/12/2015
Cost Estimation V: Subject Areas
Engineering Economics
Time Value of Money
Equivalence of Cash Flows
Analyzing a Project
Present Worth
Equivalent Annual Worth
Return on Investment (ROI)
Comparing Alternatives and Projects
Mutually Exclusive Investments
Replacement Analysis
Case Studies
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Cost Estimation VI: Decision Analysis
Decision Making under Certainty
Decision Making under Uncertainty
Decision Making under Risk
Means Objectives
Fundamental Objectives/Hierarchies
Mean-Objectives Networks
Influence Diagrams
Decision Trees/Decision Matrix
Expected Monetary Value (EMV)
Expected Value of Perfect Information
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